Letter to the editor: Felderhof article 'offensive'

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2013-02-05

The article, “Felderhof’s new life after Bre-X,” (T.N.M., Dec. 31/12) struck me as your publication having come full circle on the biggest fraud in the history of the mining business. In late 1996 and early 1997, The Northern Miner was at the forefront of exposing Bre-X for the fraud it turned out to be; more recently, Trish Saywell’s article reads like the “John Felderhof Redemption Tour” — a continued proclamation of his innocence wrapped around a preview of the autobiography he is reported to be writing.

There are many theories about who, and how many, were responsible for the fraud, and in the Miner’s article, Felderhof alludes to his own theories. So did film director Scott Rosenfelt, who signed Felderhof as technical advisor for a movie on Bre-X, for which shooting was reported to have begun in January. With Felderhof as technical advisor and presumably with script-vetting rights, one wonders what kind of movie would result from the collaboration.

But after the passage of time one thing remains abundantly clear: As Bre-X’s vice-president of exploration, Felderhof, at the very least, should have known better.

Felderhof claims to have been too busy supervising four different Indonesian drilling programs. But when one of them — Busang — had success on a scale and pace that was unprecedented in the annals of gold mining, maybe that project deserved a bit more attention than the others.

Some, perhaps Felderhof among them, may see a middle ground between complicity and incompetence: obliviousness, of being swept away in the euphoria and riches of discovery. With a string of important discoveries made in a remarkably short time span — Dia Met Minerals’ and Aber Resources’ diamond discoveries, Arequipa Resources’ spectacular Pierina gold deposit and Diamond Fields’ Voisey’s Bay nickel discovery — the resource market was certainly ripe for a fraud, and Bre-X delivered it in spades.

Unfairly but predictably, the entire resource industry was widely discredited by the Bre-X fraud and the industry was dealt a market blow from which it took almost five years to recover.

Other legacies of Bre-X have been widespread regulatory reform, a higher profile for lawyers and accountants at the expense of geologists, and a well-meaning — many would say naïve — effort to de-risk the inherently risky business of mineral exploration.

There is no question that Felderhof played a key role in devastating thousands of investors, discrediting an entire industry, then leaving that industry saddled with new rules and regulations that are the product of a corrective regulatory pendulum swinging too far.

In light of Felderhof’s role at Bre-X, something tells me that I am not alone among your readers who find it offensive for Felderhof’s redemption tour to be playing out on the pages of the Miner, especially in light of the lead investigatory role taken by the paper in the late 1990s.

John Felderhof is entitled to his side of the story, but this longtime reader hopes it won't continue to occupy space in The Northern Miner. I can wait — or not — for the movie.

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